>>> Lagarde: Global growth is still uneven and tepid, roughly around the same pa

Lagarde: Global growth is still uneven and tepid, roughly around the same pace as seen in 2014 
- Declines in energy and commodity prices will likely continue
- Normalization of US monetary policy may boost volatility, higher US rates reflecting an improved economy will be positive for the region
- Brazil's gradually growing primary surplus is needed to bolster its credibility in domestic affairs

>>> Foot Locker beats by $0.06, reports revs in-line; comps +7.8% vs. mid-single

Foot Locker beats by $0.06, reports revs in-line; comps +7.8% vs. mid-single digit guidance
Reports Q1 (Apr) earnings of $1.29 per share, $0.06 better than the Capital IQ Consensus Estimate of $1.23; revenues rose 2.6% year/year to $1.92 bln vs the $1.91 bln consensus.
  • First quarter comparable-store sales increased 7.8% vs. mid single digit growth guidance.
  • The Company's gross margin rate improved to 35.0% of sales from 34.6% a year ago.
  • Company's merchandise inventories were $1.234 bln, 2.7% lower YoY.

(Wunderlich) TWC: Now the belle of the ball - but U.S. and Gallic admirers caref

Time Warner Cable: Now the belle of the ball - but U.S. and Gallic admirers carefully sober

Wunderlich notes the WSJ is reporting that Buy-rated Time Warner Cable (TWC) is now in discussions with Charter Communications (CHTR) and European cable operator Altice (ATCEY) regarding a merger - with WSJ viewing CEO Rob Marcus as a willing but disciplined seller. FCC Chairman Tom Wheeler's supposed communication to the U.S. CEOs that it does not have a blanket disposition against cable mergers ameliorates regulatory risk perception, although firm thinks there is a good likelihood that TWC could be divvied up between Charter and Altice with no profligate bidding war or huge regulatory cloud. TWC's still-in-process operational improvement and synergies suggest to firm that the eventual takeout price could be more in the $185-$190 vicinity than the prior oft-cited $170 level.

(Makor) Nokia for Alcatel. Altering terms? NEW note pdf



Nokia (NOK1V FH) for Alcatel-Lucent (ALU FP)

Altering terms?

PDF attached

 

After Nokia sold the D&S business, Nokia shareholders bought into a cash return story. Instead, in April 15, Nokia shareholders were placed in a path to partaking in an (arguably) more exciting integration story. The current proposal at 0.55 Nokia per ALU share is structured with no cash component to remain disciplined financially (says the company) and to continue to chase investment credit rate (currently Nokia is just outside investment grade at BB+).

 

The industrial rationale for Nokia/Alcatel particularly Nokia Networks + ALU Access seems strong. It is no secret that demand for data and network capacity using mobile devices is massive. Networks “currently predicts that worldwide mobile data traffic can be approximately 1,000 times that of 2010 before the year 2020”.

 

The need from mobile operators for the products and services Networks+Access offer exists but competition is intense. Cisco Systems,

Ericsson, Fujitsu, Huawei, Nokia, Alcatel-Lucent, Samsung, ZTE,

Adtran, Calix, Ciena and Juniper are all competitors therefore price is important. Scale matters and with ALU Access, Nokia could add >60pct to its Networks revenue base plus a larger pool of key skilled personnel. Scale also helps Nokia to respond to a more selective list of operators as consolidation of companies (Orange for Jazztel, Vodafone for Kabel etc) continues. The evident overlaps between Nokia and ALU are within the networks segment.

 

Nokia is also acquiring ALU IP Networking business and cloud-based applications. Makes sense in a world where critical services, applications and data may move to the cloud and IP routing failures or architecture becomes increasingly important. We note that such shift may require larger and larger data centers. The Nokia/ALU merger illustrates why the ongoing takeover of Telecity has logic. To a lesser extent it also puts the spot-light on cloud companies like Iomart, who received a withdrawn offer from CVC last September. 

 

Nokia however is proposing ALU shareholders accept a low premium. When Nokia announced the merger, the undisturbed price was Eur3.86 Alcatel vs Eur7.77 Nokia. On ratio 0.55 the equivalent offer was Eur4.27 thus premium was only equivalent to 11pct.

 

The ALU recognisable deferred tax assets amount to Eur13.7bn. (ALU’s own adjusted tax loss carry forward is Eur11.4bn). From merger precedents, we know that not all of the deferred tax assets could be used by Nokia to offset profit. Attaching value to deferred tax is an approximation exercise, but if only 10% is operational in nature and can be used in the respective tax jurisdictions, the ALU deferred tax value to Nokia could be the same as the proposed Eur1.1bn premium on offer (Eur0.41 x 2824 outs shares) or Eur1.5bn if using fully diluted ALU shares

 

That is even before one talks about the cost synergies to be derived from the deal. ALU shareholders are unlikely to perceive the current offer as good value in our view.

>>>PartnerRe Responds to EXOR Rejection of Good Faith Invitation to Engage in Co

PartnerRe Responds to EXOR Rejection of Good Faith Invitation to Engage in Constructive Discussions 

PartnerRe issued the following statement in response to a letter from EXOR (EXO IM) regarding its offer to acquire all of the outstanding common shares of the Company for $137.50 per share in cash:

By demanding that we declare their offer reasonably likely to be a superior proposal as a precondition to any negotiations, EXOR has effectively rejected our Boards good faith offer made yesterday to engage in discussions on price and other terms. We have made it very clear that EXORs price and terms are unacceptable.

The waiver we obtained from AXIS to engage with EXOR contained no restrictions whatsoever that would impede full and open discussions and we remain interested to proceed on that basis to determine whether the offer can be improved so that it is compelling to PartnerRe shareholders on price and terms.

EXORs portrayal in its letter of discussions between EXOR and PartnerRe is simply not credible. While it relates to an earlier proposal, and is not relevant to the latest offer, we point out one last time that we consider inaccurate EXORs statement that they did not portray their prior proposal as best and final.

>>> BlackBerry targeted for acquisition, say sources

BlackBerry targeted for acquisition, say sources

BlackBerry is once again being pinpointed as a target for acquisition after it managed to swing back to profitability in the fourth quarter of fiscal 2014 (December 2014-February 2015) following its recent corporate restructure, according to industry sources.
Microsoft and a number of China-based handset vendors, including Xiaomi Technology, Lenovo and Huawei, are being indicated as potential investors, the sources noted.
Microsoft reportedly has commissioned investment companies to evaluate the possibility of taking overBlackBerry, aiming to enhance its competitiveness in the business mobile solution segment as well as its patent portfolio in the Internet of Vehicles (IoV), mobile platform and communications sectors, the sources indicated.
Microsoft has an advantage to take over BlackBerry since the Canada-based company has shifted its business focus to software products instead of hardware devices, which complements Microsoft's product lines, said the sources.
China-based handset vendors intending to acquire BlackBerry are aiming at improving their presence in the business sector in the US and Europe, while also expanding their platform products and patent portfolios, added the sources.
But it may be difficult for China-based vendors to pass the scrutiny of regulatory agencies in the US and Europe on concerns of national security, commented the sources.